Let’s no lie to ourselves—starting a business in Nigeria is not for the faint-hearted. From unstable electricity to multiple taxes and wahala here and there, Nigerian entrepreneurs really dey try. But the real gbas gbos usually starts when it’s time to raise money.
If you ask any tech founder or small business owner the one thing that gives them sleepless nights, na capital. How you wan take build product, hire people, or market your idea without money? E no possible now.
How Fundraising Really Works
Normally, most people begin with small money from their own pocket—or beg family and friends wey believe say “your head dey there.” That one na the usual beginning. But if na tech start-up you dey do, forget that one o. From building app to testing product to finding users, everything dey chop money like fire.
Some lucky people fit manage bootstrap their way from ground zero—grinding slowly until the business starts to pay small. But for most founders, na investor money go help move the idea forward. That’s why many dey go for equity funding, because debt go just choke you when your revenue never mature.
Understanding All These Equity Rounds
Every time wey you raise money from investors and give them small piece of your company in return, na equity round be that. But before anybody drop shishi for your matter, dem must first value your company—how much e worth based on things like your market size, your team’s pedigree, and your current performance.
Let’s break the rounds down like we’re gisting in your parlour:
Seed Round – The First Lifeline
This one na the first real money most start-ups dey collect. You go see angel investors or small VC firms wey go take risk on your idea. Sometimes, e fit even be accelerator wey go give you $25k–$100k plus mentorship.
But don’t think say anybody go just drop money like that. You need at least small working product (Minimum Viable Product), one or two users, and clear proof say people need what you’re building. If not, dem go just tell you “we’ll keep in touch”—which na code for nothing dey happen.
Series A – Let’s Scale Small
If your business don show small sense and the investors dey feel you, next stop na Series A. This round na when you convince people say your idea no be fluke—you’ve found a way to make money from it. Dem wan see how your business go scale, how you go make the money multiply. If you no sabi explain that well, bros, dem no go gree.
Series B – Expansion Mode Activated
This round na for serious scale-up. You never need to be profitable yet, but you must get track record—real traction. If your numbers dey point up and to the right, Series B go give you that ginger to enter new markets, hire better team, or open new branches. If you don reach here, congrats—you don leave hustle, enter business.
Series C and D – Big Boys Table
Once you reach Series C, your talk go change. You fit dey eye IPO, big acquisition, or just want to dominate your industry. Investors wey dey show face here no be small boys. Dem dey look for businesses wey go blow properly and give them returns fast.
Some companies even reach Series E, F, G. As long as your story still sweet, and money dey enter, people go still invest.
Na Wetin Dey Worry Startups for Naija Be This
But let’s not act like it’s all rosy. Raising money in Nigeria get plenty obstacles.
1. Poor Financial Records
Most small businesses no dey keep proper books. No accounting software, no audited statements—just vibes. And no investor go drop heavy cash without seeing how your money dey move. Na why many dey lose funding when due diligence start. Dem go just say, “we’ll get back to you”—again, code.
2. No Money for Consultants
You need experts—lawyers, auditors, tax consultants—to package you well. But dem dey cost money, and most start-ups no fit afford them early on. Sadly, that lack of preparation dey cost some founders plenty opportunities.
3. Regulatory Wahala
This one dey tire person. Especially for fintech. CBN go wake up one morning and ban one thing, or change rules without warning. If you’re not careful, you go build product finish only for regulation to scatter everything. Many foreign investors dey fear because of this same unpredictable terrain.
So Wetin Be the Current Situation?
Even with all these kasala, Nigeria’s tech ecosystem still dey boom. Over 300 accelerators, angel groups, syndicates, and micro-VCs dey currently invest in Naija start-ups—with ticket sizes ranging from $25k to $25 million. Omo, money dey—if your idea and execution make sense.
Let’s not forget: Kuda raised $25m in March 2021 and another $55m four months later. Flutterwave became a unicorn (that means $1 billion valuation) within just 5 years. All these success stories dey encourage more founders to try their luck. Na “if dem fit do am, why I no go fit?” dey motivate plenty people.
But E Get People Wey Dey Shout “Bubble!”
Some analysts dey worry say the fintech sector don dey overhyped. Dem dey fear say the valuations don too high and go burst like balloon. But others believe say the risks are justified, given the growth potential.
After all, high risk, high return—abi no be so?
Tax Incentives for Small Startups
Thanks to the Finance Act of 2019, small businesses wey earn less than ₦25 million yearly no dey pay Company Income Tax again. Dem even exempted from VAT. That alone na big motivation to test waters without fear of government wahala. At least, e go help you breathe small while you hustle.
So, Wetin the Future Dey Talk?
Covid-19 don reset everything. Life don move online—work, shopping, banking, learning, even romance. You sef know say the world no go ever go back to how e be.
That’s why tech dey shine now. Nigeria, with its young population and crazy market potential, no go carry last. Already, we dey among the top 5 African countries pushing this tech revolution.
With smart founders, solid ideas, and better access to funding, Naija go soon become the Silicon Valley of Africa. E remain small.
Final Word
Raising funds in Nigeria no easy, especially if you dey build tech startup. But if you package well, stay compliant, and build real value, the sky no be your limit—na just starting point.
If you need help navigating this whole fundraising and compliance journey, abeg no do trial-and-error. Get proper advice. Because as Naija be, na who sabi road dey pass express.